The Farmers' Union of Wales' today gave the new Chancellor's budget a guarded welcome while stressing that it is still early days and only with time will the farming industry be able to assess the impact of cuts in the public sector.

However, the union praised the Chancellor's reintroduction of Furnished Holiday Lettings (FHL) tax allowances. "The FUW has campaigned vigorously for the reintroduction of FHL tax allowances because scrapping these benefits would have seriously affected the income of many of our members who have diversified into letting out holiday accommodation," said the union's business development director Emyr James.

"Some of them have done so after acting upon past government advice which encouraged diversification into the tourism industry. Today's announcement will come as a welcome boost for both the agricultural and tourism business in Wales."

The Union was also pleased to see no further increases in fuel duty following the last increase in March.

"Another increase today would have had a direct impact on the cost of production at a time when the country needs business to flourish," said Mr James.

The Chancellor's intention to increase VAT to 20% should not directly impact upon the agriculture sector as food is to remain exempt. "But in wider terms it could pose a cash flow problem for some farmers and affect the consumer''s disposable income available to spend on purchasing better quality cuts and products," said Mr James.

Another worry for the industry would be the further government departmental cuts announced by the Chancellor. Mr James added: "Time alone will only tell whether these departmental cuts, which include DEFRA, will have a direct impact on the agricultural industry in Wales.

"One thing is for sure, it is imperative that the economy continues to grow so that we can trade ourselves out of this recession."

The Farmers' Union of Wales today described a European Parliament decision to demand mandatory country of origin labelling of food as a major step forward in the union's lengthy campaign to protect the high quality of Welsh produce.

"Farmers in Wales have good reason to want all producers to ensure labelling is accurate and unambiguous," said FUW president Gareth Vaughan.

"In the past few years imported meat has been the subject of a number of mislabelling incidents which could have tarnished the quality image of food produced in Wales and the union was compelled to highlight the mislabelling of Argentinian rump steak - displaying the British flag and British farm standards logo - at a major supermarket chain in Bangor.

"The store said the mislabelling was a mix-up and was quickly corrected after it was pointed out by the union. Another FUW member in Snowdonia revealed how meals served to children at a local school included food said to be '80% Welsh Beefburgers' but the labels on the boxes stated they were manufactured by a company in Hull."

During yesterday's debate in Strasbourg around two thirds of UK MEPs agreed to back a clear demand to send a strong political message in favour of mandatory country of origin labelling to the other EU institutions.

Their amendment urges "the country or place of provenance shall be given for the following: meat; poultry; dairy products; fresh fruit and vegetables; other single ingredients and meat and poultry and fish used as an ingredient in processed foods".

Their decision will now be passed onto EU governments in the Council of Ministers for approval. "We hope the Council of Ministers will now agree with the commonsense approach of MEPs to this matter and offer no more opposition to the measure," Mr Vaughan added.

A high-powered delegation from the Farmers' Union of Wales today raised a series of issues with Rural Affairs Minister Elin Jones during a two-hour meeting in Aberystwyth.

High on the agenda was the controversial Glastir land management scheme which was also discussed at length during the union's annual general meeting last Monday when the Minister addressed anxious delegates.

"Glastir dominated the debate at the AGM so we were duty bound to raise several issues about the scheme with the Minister again today," said FUW president Gareth Vaughan.

"As a union we still maintain that a 12-month deferment of the scheme is warranted but we are pleased that the Minister agreed to look at certain specific aspects that were raised with her today."

The meeting also touched upon a range of other issues including TB, CAP reform and the disproportionate penalties imposed on farmers for relatively minor errors on their IACS/SAF forms.

The Farmers' Union of Wales today welcomed the outcome of a National Assembly inquiry which refused canoeists' requests for free open access to Welsh rivers.

Instead, the Assembly's sustainability committee called for voluntary access agreements by landowners, a licensing system for those using unpowered craft on inland waters and a fee for those making a profit out of water-related recreation.

FUW land use and parliamentary chairman Richard Vaughan, who gave evidence to the committee's inquiry, said the union was concerned at the impact any increased, unmanaged access to inland waterways would have on adjacent farmland as there had been several trespass incidences across farmland by users wishing to reach or leave an inland waterway.

"We believe the committee has made a sensible response to the canoeists' demands and we welcome its recommendations which support reasoned discussion on access issues," he said.

"The union is totally opposed to a statutory approach to access to inland waters as it believes there are major farm management issues associated with such a proposal, given the amount of inland water within Wales.

"The FUW strongly believes that if the Assembly is seeking to improve access to any part of the countryside and want to encourage landowners to participate in voluntary arrangements, it must seriously consider ways in which to reduce the liability burden on farmers.

"Feedback from our members suggests that working in partnership and increasing dialogue will prove far more constructive than the introduction of blunt policy instruments which will foster resentment and conflict between all parties.

"It is also important to ensure that all relevant parties are involved in discussions to ensure that any agreement reflects the commercial and environmental priorities identified for that particular waterway."

Mr Vaughan stressed that the FUW is not opposed to water-based activities. "In fact, we have members involved with diversified enterprises that encourage canoeing, kayaking etc, through voluntary agreements, provision of infrastructure and access points to and from the water.

"Many farmers are also actively involved in their local angling associations and much voluntary time, effort and resources are put in by individuals to maintain and enhance the environmental value of the areas they manage.

"Similarly, landowners may incur costs in maintaining waterways which abut their property. Therefore, it would seem only equitable that recreational users, who do not wish to be party to voluntary arrangements, should be required to pay a license fee to the Environment Agency, to help them maintain the resource they enjoy.

"This method would provide revenue to the Welsh economy and assure landowners that licensing comes with a code of practice, which would highlight the need to access or leave waterways on designated rights of way, and provide all users a stake holding in waterways which would act as justification to preserve and enjoy."